Date: 09/22/2000 8:48 AM
Subject: Reference File No.:S7-13-00
I am writing to express my concern for the SEC proposal, referenced above,
regarding Non-audit Services.
I am a CPA working for a medium-sized public accounting firm and am
concerned that the proposed rules would dramatically curtail the ability of
accounting firms to provide services other than audit and tax services to
SEC clients. If these restrictions are placed on large, multinational firms,
who's to say that they will not be placed on the operations of smaller, more
localized firms?
This will eventually restrict our ability to provide accounting and
bookkeeping services, valuations, management, consulting, financial
planning, and other services that are the growing areas of service for most
local firms. Local CPA firms will find difficulty surviving if they are
forced to choose between audit and non-audit services!
None of the SEC's research conducted has found evidence to support the
conclusion that providing non-audit services has impaired independence or
audit quality. CPAs take the profession's independence standards and the
responsibility to represent the public interest seriously. It's an attribute
and responsibility that defines us as a profession. Since there has been
nothing to demonstrate any significant problem in this regard, we struggle
to figure out just what is the motivation to pursue such a dramatic change!
I am also concerned when I read that the SEC ignored the conclusion of the
current Panel on Audit Effectiveness of the Public Oversight Board, a Panel
that was formed at the request of the SEC. The panel concluded that, "both
the profession and the quality of audits are fundamentally sound." The Panel
said it could find no evidence that the provision of non-audit services has
hurt audit quality. On the contrary, it concluded that in numerous instances
non-audit services contributed to a more effective audit.
In addition, the SEC lacks authority for its sweeping scope of services rule.
The statutory provisions cited by the SEC in the proposed rule pertain to
public companies' filing of financial statements that have been audited by
independent accountants and do not expressly authorize the SEC to make rules
governing or regulating directly the accounting profession itself. The
proposed rule is based primarily, if not entirely, on alleged concerns
relating to the "appearance of independence" - but not independence in fact.
The SEC does not have statutory authority to impose restrictions because of
possible perceptions about independence.
In closing, I feel that the SEC proposal is unwarranted and without merit.
Please consider the facts stated in this letter when making your decisions.
I am also urging our congressional representatives and Senators to support
us in opposing the SEC's apparent plans for adoption.
Thank you for your time and consideration.
Sincerely,
Jamey R. Bryan, CPA